9 February 2017 | By Barnaby Wharton Insight

11 things an Emissions Reduction Plan needs to deliver

Insight: Barnaby Wharton, CBI senior policy adviser, infrastructure and energy

This spring, government will publish an Emissions Reduction Plan. CBI’s report, Stepping up to the challenge, sets out a whole-economy approach and a change in mindset to embed low-carbon thinking 

Since the UK legislated in 2016 to reduce carbon emissions, businesses have made good progress: emissions are nearly 40 per cent down against a target of 57 per cent on 1990 levels by 2030. To remain prosperous and competitive, government and business need to continue to work together, and with the public, to create a low-carbon future.

Here are 11 things CBI would like to see government talk about in its Emissions Reduction Plan, which will set out how it expects to meet the UK’s long-term emissions goals

1

A long-term plan

 

Businesses need clarity on what 2030 will look like so that they can invest today. For many businesses 2030 is only an investment cycle or two away. Power plants and roads being built today will be around for years to come, and need to include low carbon thinking.

2

A whole system approach

 

We are living in an increasingly interconnected world and policy needs to acknowledge those connections. With the rise of autonomous vehicles, connected homes, and smart appliances the way we interact with the internet, the power system, and even our surroundings is changing. This is a trend that is set to continue and policy needs to be able to adjust quickly, whether that’s around cyber security, regulation, infrastructure investment, or even how consumers engage with energy suppliers as both producers and users of energy.

3

Business empowered to deliver

 

Low-carbon policy needs to work with markets and business. Ultimately, it will be businesses – of all shape and sizes – that deliver the products, ideas, investment and infrastructure that will create the low-carbon economy we need. In order to be successful they need clarity on long-term policy, goals and milestones, as well as the opportunity to engage at all stages of the policy-making process. If low-carbon policy does not work for business, it is not going to work at all.

4

A low-carbon industrial strategy

 

Within its industrial strategy white paper the Government has already indicated its support for areas where the UK has a competitive advantage – such as offshore wind and electrical storage. As well as continued support in these areas, it should also consider how a low-carbon mindset can be embedded across the whole industrial strategy, delivering prosperity and growth while meeting our carbon targets.

5

A global outlook

 

Government should work with the global ambition set out in the Paris Agreement, and strive for a global carbon price. Climate change does not respect borders and, as we leave the EU, our policy ambition should be global, too.

6

New ways to heat our homes…

 

Decarbonising heat will be crucial to meeting carbon targets – heating and hot water accounts for 40 per cent of the UK’s total energy consumption. The UK has a diverse housing stock and as such we’ll need a range of solutions, including green gas, district heating (using local pipe networks to heat from one central source) and heat pumps.

7

…And more efficient heating in our homes

 

Government needs to refresh our domestic energy efficiency strategy to keep the warmth in and costs down. After all, the cheapest energy is the energy we do not use. We have some of Europe’s least well insulated homes, so sealing the leaks will go a long way to cutting costs.

8

A gear change on low emission vehicles

 

We need to see a roadmap to develop the infrastructure that will support ultra-low emissions vehicles in cities and the countryside. Cutting exhaust fumes from vehicles can reduce emissions and improve heath across the UK.

9

A smarter and more flexible energy system

 

A smarter system with more flexible demand and storage is needed. With more demand from electrical heating and cars, and more renewables generating power at variable times, the system needs to be able to respond dynamically.

10

Keeping industry competitive

 

Manufacturing processes can be carbon intensive, but having a strong industry here in the UK brings investment, jobs and prosperity. It’s therefore important that while making the transition to a low-carbon economy UK industry continues to receive support in order to remain globally competitive. This can be through incentives, and clear signals to drive investment in energy efficiency, as well as a plan for the future of carbon capture and storage.

11

A new mindset for energy

 

The low-carbon future needs to be in the mind of everyone in government. It is not just for those few policy people that are working on it, but everyone from the Prime Minister on Downing Street to shoppers on the high street. 

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